When our kids were young, MGM was not a full day park for us, there just wasn't enough that we thought would interest them without scaring them (for my ds at the age of 4, even seemingly innocent things like Muppetvision 3D were out, although he had been fine with it when he was younger). But seeing Fantasmic was a priority. So what we did last trip, when the kids were 4 and 7, was have a relaxing morning at the hotel pool, eat lunch at the hotel, then clean up and head over the park mid afternoon. Our "must sees" were Playhouse Disney Live, Beauty and the Beast show, the afternoon parade, the Honey I Shrunk the Kids Playground and Voyage of the Little Mermaid. We checked show schedules ahead of time so we were sure to arrive in time to catch the last Playhouse Disney show of the day (as I recall it ends earlier than some other shows). We had to stay on a tight schedule but in under three hours we had done all of these things and also taken advantage of some of the street performers, and we were at our Fantasmic dinner package seating. We saw Little Mermaid between dinner and Fantasmic. The dinner package was fabulous with young kids becase we didn't have the long wait for Fantasmic. We got through the whole evening with no crabbiness due to planning the shorter day. In the past, when the kids were even younger, we had tried to spend more time but we just found that they really didn't care at all about things like the backlot tour, and dh and I decided that while they were that young we would prefer to limit our time in the park and enjoy the things we went to rather than trying for a longer day to do child swap at the adult rides.
Another option would be to go in early and take a long midday break, but since there just wasn't that much that interested the kids we found the late arrival worked better for our family.
This year the kids are 7.5 and 10 and we are planning an entire day, but when they were the age of your kids it was definitely our last favorite park.